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OIG questions Medicaid spending by managed care plans 

OIG questions Medicaid spending by managed care plans 

WASHINGTON – CMS has an opportunity to strengthen state oversight of reporting by Medicaid managed care plans on medical loss ratios (MLRs), according to a new report from the Office of Inspector General.

States reported that most Medicaid managed care plans submitted MLR reports; however, the OIG found that 49% of the 495 MLR reports reviewed were incomplete.

These incomplete MLR reports were missing at least one of seven numeric data elements that are essential to the MLR calculation. This missing data occurred across four of the seven MLR report data elements: non-claim costs; taxes and fees; member months; and quality improvement activity expenses. The data element for non-claims costs, generally defined as plan expenses for administrative services, accounted for the majority of incomplete MLR reports.

Missing data on non-claims costs may reduce transparency on managed care spending and limit a state’s ability to ensure that plans are appropriately spending Medicaid dollars on the health of enrollees rather than excessive administrative expenses.

The OIG recommend that CMS:

  1. design an annual MLR reporting template for states to provide to their Medicaid managed care plans;
  2. clarify that states should verify the completeness of their plans’ MLR reports;
  3. clarify that states should review their plan’s MLR reports to verify the accuracy of reported data elements; and
  4. provide additional guidance to states regarding plan’s reporting of non-claims costs in MLR reports. CMS concurred with all recommendations.  


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